The district wasn't aware of bigger looming losses when the levy was passed.
HOWLAND -- Howland Local Schools didn't collect enough tax revenue to support its programs for the year that ended June 30, 2004, despite passage of an additional levy the year before, a state audit shows.
There were no findings for financial recovery.
The audit showed that general revenues accounted for $24,395,980 in revenue or 89.69 percent of all revenues. Program-specific revenues in the form of charges for services and sales, grants and contributions accounted for $2,805,153 or 10.31 percent of total revenues of $27,201,133.
The school district had $28,445,712 in expenses related to governmental activities; $2,805,153 of these expenses was offset by program specific charges for services, grants or contributions.
General revenues supporting governmental activities (primarily taxes and unrestricted grants and entitlements) "were not adequate to provide for these programs," the report states.
In May 2003, voters approved the first additional school levy since 1992: a 5-mill, 5-year additional levy for emergency requirements. This levy, to raise $3.05 million a year, was needed to offset state funding cuts, and to preserve remedial programs and others, school officials said.
In fall 2003, however, the district was made aware of major tax appeals on personal property and a bankruptcy of a major company in the district -- and lost about $1.8 million from its budget, the report states.
The two corporations were Delphi Packard Electric Systems and WCI Steel Inc. WCI's bankruptcy proceeding continues.
Even before that, in 2002-03, Howland schools experienced a drop of about 4 percent in operating funds because of lower interest rates, less investment money, state funding cuts, delinquent property taxes and a 22-percent jump in hospitalization insurance premiums.
The district was unaware it would be facing these losses when it sought, and voters approved the additional levy, the report says
"The board continues to place cost reduction factors into the budget by reducing staff and holding back on capital equipment expenses," the report continues.